As global commodity markets remain bullish in the short term, analysts see palladium as one of several non-oil export opportunities in Nigeria. With global markets preparing for greater diversity in supply chains, the African continent has been identified as a honey pot for rare metals. Nigeria previously a major producer of tin, coal, and columbite has since shifted its sights toward the exploration of crude oil. 

Mining economists have noted that several valuable metals could be mined in the country with greater investment in the sector. For example, Lithium, a metal in high demand for batteries in electric vehicles, was discovered in Nigeria in 2019. Efforts by one of the richest men in the world, Elon Musk, to mine the rare element were rejected by the minister of mines and steel development.

Palladium another rare metal, considered to be 30 times rarer than gold and seldom found in pure form comes as a by-product of other metal like iron, making it expensive to refine, hence, its high sale value presents another trade opportunity for Nigeria. Africa’s largest economy is known for its high supply of unrefined Palladium and for being the cheapest in the market while being extremely pure and ready to use. Palladium, like its counterpart Platinum, is used in jewellery production. It also produces catalytic converters and can serve as a chemical catalyst in many other industries. Most of this rare metal comes from mines in Russia, South Africa, the United States, and the United Kingdom, dominating about 76.7% of globally exported Palladium in 2021 (see table 1 below).

Table 1: 

Should Nigeria Invest in Palladium Mining?

Comparing Palladium to Crude oil, Palladium is more expensive. In conversion, 1 barrel would equal over 5,000 troy ounces, implying that there is more to make from the production and export of Palladium. Whilst the price differential between these two commodities suggests higher potential earnings from palladium, supply and demand play a significant role in determining which offers greater value (see table 2 below).

Table 2: 

Presently, crude oil has a higher global demand than Palladium and has a bigger market. But as the world tries to look to cleaner sources of fuel, with going green at the top of the list to reduce carbon emissions, Palladium has the opportunity to play a critical role in the future.

While the mining of Palladium would not serve as a substitute for crude oil, Palladium’s future is assured. According to the NBS, between January and September, Nigeria’s export of solid minerals was second to the lowest in growth at 0.31%, behind energy which stood at 0.25%. If Nigeria is to benefit from the growing demand for Palladium, in a market that totalled US$ 34bn in international sales as of 2021, it must be ready to improve the mining sector, thereby increasing exports and income (see chart 1 below).

Chart 1: